63. Disposal of net profits.

(1) A multi-State co-operative society shall, out of its net profits in any

year,

(a) transfer an amount not less than twenty-five per cent. to the reserve fund;

(b) credit one per cent. to co-operative education fund maintained, by the National Co-operativeUnion of India Limited, New Delhi, in the manner as may be prescribed;

(c) transfer an amount not less than ten per cent. to a reserve fund for meeting unforeseen losses.

(2) Subject to such conditions as may be prescribed, the balance of the net profits may be utilised for all or any of the following purposes, namely:

(a) payment of dividend to the members on their paid-up share capital at a rate not exceeding the prescribed limit;

(b) constitution of, or contribution to, such special funds including education funds, as may be specified in the bye-laws;

(c) donation of amounts not exceeding five per cent. of the net profits for any purpose connected with the development of co-operative movement or charitable purpose as defined in section 2 of the Charitable Endowments Act, 1890 (6 of 1890);

(d) payment of ex gratia amount to employees of the multi-State co-operative society to the extent and in the manner specified in the bye-laws.

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